U.S. Sells Off Last Major TARP Investment, 6 Years On

U.S. taxpayers made around $2.4 billion in the Ally investment

The U.S. has finally sold off its remaining major investment in the Troubled Asset Relief Program, six years after beginning to bail out auto companies, banks and financial institutions in the depths of the Great Recession.

The Treasury Department announced Friday that it will sell its remaining stake in Ally, the former financing division of General Motors, capping the end of its last major TARP investment and the auto rescue program.

Treasury touted that selling the nearly 55 million shares netted $1.3 billion for taxpayers, and $19.6 billion overall after spending $17.2 billion on Ally. However, the government’s overall losses on the $85 billion auto industry bailout were about $10 billion, the Detroit News reports.

After former President George W. Bush signed TARP into law in October 2008, the U.S. poured hundreds of billions of dollars to stabilize banking institutions, AIG, the auto industry and families facing foreclosure.

“The Auto Industry Financing Program helped save the auto industry, more than one million jobs, and prevent a second Great Depression,” said Treasury Secretary Jacob J. Lew.

“Thanks to President Obama’s leadership, our economy has rebounded from the depths of the financial crisis and is now creating jobs at the fastest pace since the 1990s. There is more work to do, but as we exit the last major financial investment, it’s important to take stock of the progress we have made, and the critical role TARP and the Auto Industry Financing Program played in getting us to this point.”

Under Secretary for Terrorism and Financial Intelligence David S. Cohen said Thursday ISIS is probably the “best-funded terrorist organization we have confronted."

The Islamic State of Iraq and Greater Syria (ISIS) is the “best-funded” terrorist organization the U.S. has ever confronted, the Treasury Department’s top official for combating terrorist financing said Thursday.

Speaking at the Carnegie Endowment for International Peace on Thursday David Cohen, the under secretary for terrorism and financial intelligence at Treasury, outlined a multi-pronged strategy for cutting off ISIS’s access to resources — including as much as $1 million per day in oil sales.

Touching on a topic of heated international debate, Cohen also called on foreign governments to refuse ransom payments to free their kidnapped citizens from terrorist groups.

Because ISIS “poses a different terrorist financing strategy,” than other terror groups, the strategy against it has to look different, Cohen said. Unlike other major terrorist organizations such as al-Qaeda, which are primarily reliant on wealthy donors, ISIS gets most of its funding not from the illegal market sale of oil, as well as from ransoms and extortion.

Although ISIS conducts most of its business on the black market, Cohen said the Treasury Department can disrupt the group’s finances by identifying and targeting people who operate within the legitimate economy but who also trade illegally with ISIS.

“The middlemen, traders, refiners, transport companies, and anyone else that handles [ISIS]’s oil should know that we are hard at work identifying them, and that we have tools at hand to stop them,” Cohen said during prepared remarks.

The U.S. government is prepared to impose financial sanctions on both ISIS’s leadership and its financial donors. Cohen said Thursday that two individuals were sanctioned in late September, including a military commander and a person who arranged a $2 million donation to the organization. But the effort will take time, Cohen noted, and will require “cooperation and collaboration with partners in the region,” including private sector banks in Iraq and Syria that might be used to store ISIS cash.

He also urged more countries to refuse ransom payments when their citizens are kidnapped. “If we are to protect our citizens and avoid bankrolling our adversary, every country must adopt and implement a no-ransoms policy,” Cohen said. The U.S. does not pay ransoms for kidnapped citizens, even in cases of threatened execution. Some European governments have reportedly paid millions to free hostages from ISIS and al Qaeda.

“[ISIS] has a fair amount of money today, but what’s important is that we do everything we can to make sure it’s not recurring revenue,” Cohen said. He added that, although ISIS generates an estimated $1 million per day from illegal oil sales, even that figure isn’t enough to meet the needs of the people living in the vast territory the group controls. In areas where ISIS now operates, he said, the Iraqi government’s budget surpassed $2 billion this year.

But he counseled patience as the financial prong of the war on ISIS unfolds in tandem with U.S.-led air strikes against the Sunni radical group.

“This is not going to be an exercise where we can at the end of every month produce a balance sheet,” Cohen said. “This is going to be a steady effort to degrade financing over time.”

Yes, Stocks Are Tanking — But Here’s What We Should Really Worry About

The stock market gets all the headlines at times like this -- but it's bond and oil prices we should really keep an eye on.

The U.S. stock market opened Wednesday morning with a big sell-off. The Dow Jones Industrial Average plummeted about 350 points before partially recovering.

The Dow and other stock indexes like the S&P 500 always get the headlines when a market frenzy kicks in. But right now a more telling number may be the yield on 10-year Treasury bonds, which fell to 1.9% this morning, the first time in 16 months that it’s dipped below 2%. (Bond’s yields fall when demand for them goes up and their prices rise.)

A few minutes later it climbed back to around 2%. But only a month ago it was 2.6%.

The fact that investors are currently so eager to own Treasuries that they will accept a yield of 2% or less should worry us. After all, it’s widely believed that inflation will run at about 2% over the next decade—that’s the Federal Reserve’s target rate. This means investors are now ready to earn basically nothing in exchange for lending their money to the U.S. government.

They are willing to do so because Treasuries offer as close to a guaranteed pay-out as a long-term investor can get: Assuming you hold one until maturity — and that armageddon doesn’t strike — you basically know you’ll get your money back plus the yield. You’ve heard of “flight to safety?” This is it.

Take this market behavior as evidence that, even after the market plunge, plenty of pessimism about the prospects for growth is still sloshing around. Yes, the U.S. has been (slowly) recovering from the 2008-2009 financial crisis, but Europe now seems dangerously close to another recession, which would put a drag on the whole global economy.

You can see the same dynamic in the oil markets. Crude oil futures are getting close to $80 a barrel, from above $90 just last week. That may come a relief for drivers, but it means that global investors are collectively anticipating the kind of drop in demand that comes with a weakening world economy.

Bottom line: If you want to understand what the markets are saying about the future, keep an eye on bond yields and oil prices, not only the stock market.

TIME Ideas hosts the world's leading voices, providing commentary and expertise on the most compelling events in news, society, and culture. We welcome outside contributions. To submit a piece, email ideas@time.com.

You still look like a million bucks

It was 225 years ago today that the still-nascent United States finally decided to get its financial house in order. The Department of the Treasury was established on Sept. 2, 1789, during an early session of the 1st United States Congress. The Department’s duties, according to the founding law, are:

“…to digest and prepare plans for the improvement and management of the revenue…to prepare and report estimates of the public revenue, and the public expenditures; to superintend the collection of revenue; to decide on the forms of keeping and stating accounts and making returns, and to grant under the limitations herein established, or to be hereafter provided, all warrants for monies to be issued from the Treasury, in pursuance of appropriations by law.”

Or, in layman’s terms, the Treasury Department issues savings bonds, prints cash, mints coins, collects taxes through the IRS and enforces laws related to alcohol and tobacco. People often conflate the duties of the Treasury with those of the Federal Reserve, but the two are actually separate organizations. The Treasury is a department of the executive branch and is generally concerned with properly maintaining the day-to-day activities of the government. The Federal Reserve is an independent body that sets long-term fiscal policy in an effort to control borrowing and inflation rates.

Our first Secretary of the Treasury was Alexander Hamilton, a key figure in the development of early American fiscal policy who advocated heavily for a central banking system and the federal assumption of state debts following the Revolutionary War (and no, he didn’t put himself on the $10 bill — he wasn’t added to the currency until the 1920s). The current secretary is Jack Lew, appointed by President Obama in 2013.

In addition to the Treasury’s birthday, we also just passed another significant fiscal anniversary. In August 1971, the U.S. stopped converting dollars held by foreign governments to gold at a value of $35 per ounce. The policy, called the Bretton Woods system, had been put in place following World War II to convince rebuilding countries like Germany and Japan to invest in American dollars. But by the 1960s, the system was placing strain on the U.S. economy as the number of dollars held by foreign countries outpaced the amount of gold the U.S. had on hand. Following a secret meeting at Camp David with this top advisers, President Richard Nixon announced on August 15 a suspension of the policy, transforming the dollar into a floating currency not pegged to any particular exchange rate. Nixon also announced a 90-day freeze on prices and wages in the U.S. and an additional 10% tariff on imports.

TIMEThe Aug. 30, 1971, cover of

Collectively known as the “Nixon Shock,” the measures surprised people both at home and abroad. Reporting in the days following the announcement, TIME wrote of foreign leaders abandoning their summer vacations to react to the announcement amid worries that the dollar, no longer tied to a fixed rate, would plummet in value. In the years that followed, countries in Europe and Asia also allowed their currencies to float, making exchange rates more volatile than they had been in the past.

Treasury Secretary Jack Lew Warns Time Is Running Out To Lift Debt Ceiling

Says U.S. will be unable to pay its bills past end of February if Congress doesn't raise debt ceiling

The Treasury Department will run out of “extraordinary measures” to keep the government afloat by the end of February if Congress does not act to raise the debt limit, Treasury Secretary Jack Lew said in a statement Monday.

The temporary suspension of the debt limit passed by Congress last year expires Feb. 7, but Lew warned that the Treasury would only be able to stave off a government default using “extraordinary measures”—accounting maneuvers such as deferring trust fund investments—for a “brief span of time.”

“We now forecast that we are likely to exhaust these measures by the end of the month,” Lew said.

The statement calls on Congress to act quickly to increase the debt limit so that the government can borrow the money it needs to keep functioning, and warns that delayed action could have serious financial consequences. Last year’s debt stand-off caused a plummet in consumer confidence and rattled financial markets. Lew also warned that only Congress can increase the government’s borrowing authority, and “no Congress in the history of the United States has failed to meet this responsibility.”

Anticipating a Republican argument that raising the debt limit should be tied to spending cuts, Lew reminds Congress that the debt limit is about “paying bills that have already been incurred,” and that refusing to raise the ceiling won’t make the bills go away. The statement also reminds Congressional Republicans that House Speaker John Boehner said that not only should the U.S. never default on debt, we “shouldn’t even get close to it.”

Advisers to Queen Elizabeth II have widely overspent and failed at controlling her finances, according to a parliamentary committee report issued this week. The queen’s reserve fund sank from more than $58 million in 2001 to a “historic low” of $1.6 million at the end of last year.

The Queen’s household overspent her annual budget of $51 million by about $3.8 million last year. The imprudent courtiers were advised to take money-saving tips from the Treasury, the government’s finance ministry.

The House of Commons Public Accounts Committee noted that the royal palaces were “crumbling,” the Daily Telegraph reports, and said the Treasury needed to “get a grip” to help the royal household protect them from “further damage and deterioration.”

Windsor Castle and Buckingham Palace are reported to be below “acceptable condition,” said Margaret Hodge, the committee’s chairman, and more cash is needed to address serious maintenance issues with at least 39 royal buildings overall.

“We believe that the Treasury has a duty to be actively involved in reviewing the household’s financial planning and management—and it has failed to do so,” she added.